Jayson Lowe describes how a lender converted his home equity line into a mortgage without his consent in 2008, stripping his control. He argues dividend-paying whole life insurance creates a personal "command center for your capital" that banks cannot touch, letting you borrow against your own cash value instead.
Let me share this story talking about what you can control. So back in this would have been 2007, early 2008, and at that time the financial crisis was on the horizon. Things, you know, dominoes were starting to tip over. And my wife Rebecca and I, we lived and worked in the United States and we had a first position home equity line of credit. And we had purchased a property and obviously resided there. And I get a phone call from the lender out of the blue, completely unexpected. And the lender says, just wanted to give you a courtesy heads up. Your home equity line of credit has been converted into a principal and interest mortgage, effective immediately. This is the rate, this is your payment. Now the control that we thought we had as it related to that home equity line of credit evaporated. And I was very active in real estate investment at that time, so I was relying upon the illusion of ready access to capital and it was taken away from me in an instant. That derails your plans in a real hurry and not to mention raises your blood pressure. But when you have what I refer to now as the command center for your capital, you've got a dividend paying whole life insurance contract, or ideally a system of contracts, and you've got that cash value accumulation which can't go backward, which is literally piling up daily. You're paying no tax on the buildup. Nobody from the life insurance company is ever contacting you, me or anybody to have the same conversation that the lender had with me about the home equity line of credit. Because the insurance company administers those contracts, the insurance company does not own them. And you and I both know who calls the shots in this scenario. The owner. And so that example came up for me in my thinking prior to you and I chatting this morning because it's this illusion that people have and banks can change the rules and that can put people in a real precarious position financially. If you think of a visual in your mind like you've got this growing pool of cash value which is your fuel depot, and then you've got all that death benefit in the policies, which is like your air cover and your premiums, which is your investment in what you can control, the peace of mind that comes with being able to either take advantage of a high caliber opportunity or just purely, just control something that control how you finance something that you need. A new car, an investment opportunity, a business expense, a home renovation, new appliances. Think of all those things that people readily finance. When you're controlling how you finance it creates this just this sense of calmness and peace. It's like I'm in total control here and I don't have to worry about getting a phone call like what Jason got from a lender back in early 08. You just don't have to worry about that. The absence of control just amplifies stress. And so when they catch the concept, which, as the late R. Nelson Nash often said, infinite banking, is more caught than it is taught. And when you catch it, you cannot unsee it.
